ABN Amro jumps on wealth management bandwagon in race for fees

ABN Amro is the latest European bank to seek growth in wealth management as a way to offset an expected decline in lending revenue.

“We have the ambition to make fees a more important part of our income” and cut “dependency” on interest income, chief financial officer Ferdinand Vaandrager said in the firm’s annual report published on Wednesday (Mar 13). The move will see “strategic initiatives” to expand the business with affluent clients, he said.

The Dutch lender joins a growing number of peers in the region looking to boost fee revenue. One of the most frequent strategies to do that is through investments in wealth management, with Intesa Sanpaolo chief executive officer Carlo Messina making similar comments in January and ING Groep saying last week it’s thinking about ways to grow that business.

Many banks enjoyed record profits over the past year as the gains to revenue from higher interest rates surpassed the amount they had to pay out to depositors. The European Central Bank is now preparing to cut interest rates for the first time in half a decade.

“For some time now, we have also been working on diversifying our revenue streams,” ING said in its annual report last week. “One avenue we will explore is further developing a wealth-management stream.”

Wealth management isn’t the only option available to banks seeking fee growth. UniCredit CEO Andrea Orcel said earlier on Wednesday he expects the bank to exceed last year’s performance by boosting fee revenue, with much of the increase expected to come from the insurance and asset management businesses. BLOOMBERG

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